AM Best confirms the credit ratings of Mutual of Omaha Insurance Company and its subsidiaries

AM Best confirms the credit ratings of Mutual of Omaha Insurance Company and its subsidiaries

ALDUICK, NJ March 15, 2024—(BUSINESS WIRE)–AM Best affirmed the financial strength rating of A+ (Superior) and the long-term issuer credit rating of “aa-” (Superior) of Mutual of Omaha Insurance Company and its subsidiaries, United of Omaha Life Insurance Company, Companion Life Insurance Company (Melville, New York ) and United World Life Insurance Company. At the same time, AM Best affirmed Mutual of Omaha Insurance Company’s excess bond credit ratings of “a” (excellent) for long-term issues (long-term IR). (Please see below for a detailed list of IRs.) The outlook for these credit ratings (ratings) is stable. The group (collectively referred to as Mutual of Omaha) is incorporated in Omaha, NE, unless otherwise noted.

The ratings reflect Mutual of Omaha’s strong balance sheet, which AM Best rates as very strong, as well as its strong operating results, favorable business profile and appropriate enterprise risk management (ERM).

Omaha’s mutual balance strength is very strong. The group’s risk-adjusted capitalization is assessed at the strongest level as measured by the Best Capital Adequacy Ratio (BCAR). The organization continues to report a capital and surplus growth trend that supports insurance and investment risks on a consolidated and individual operating basis. Mutual of Omaha has favorable cash flows from operations supported by good liquidity measures. Although the group’s operating leverage increased in 2023 due to its global financing program, operating leverage metrics are expected to remain within AM Best’s guidance and Mutual of Omaha’s financial leverage remains adequate.

AM Best views Mutual of Omaha’s operating results as strongly as it has reported a trend of strong net premium growth that has exceeded 10% in four of the past five years. Group operating and net income improved in 2023, driven by a favorable claims experience, a trend AM Best expects to continue in the near term. The group’s 2022 results were negatively impacted by several factors, including legal stress from new sales, lower share value, corporate-owned life insurance and changing interest rates.

Omaha’s mutual business profile is seen as favorable. Mutual of Omaha is a large and established insurer with strong brand recognition operating through a national platform. The organization is well known in the insurance and pensions markets, with a leading market position in Medicare supplements, a top 10 position in the group disability and voluntary product segments and a top 10 position in indexed universal life, structured settlement and PRT by number of contracts. In addition, the group offers a diversified product portfolio that focuses on senior employee solutions, workplace solutions and financial solutions. Mutual of Omaha operates in all 50 states as well as the District of Columbia, Puerto Rico, Guam and the US Virgin Islands.

Mutual of Omaha has a formal ERM program in place that is assessed as appropriate. The design of the ERM program enables the identification of potential events that may affect the organization, the management of risk to remain within risk tolerance and the achievement of organizational goals. The program is overseen by the board of directors, management and other personnel, and there is an extension of the risk culture throughout the organization. Mutual of Omaha has created clear risk appetite statements for guidance that are embedded in the ERM policy.

The following long-term IR is assigned with a stable outlook:

Omaha Mutual Insurance Company—
— “a” (Excellent) on $300 million 6.144% excess notes due 2064.

The following long-term IRs are affirmed with a stable outlook:

Omaha Mutual Insurance Company—
— “a” (Excellent) for $300 million 6.80% excess notes due 2036.
— “a” (Excellent) for $300 million 6.95% excess notes due 2040.
— “a” (Excellent) on $300 million 4.297% excess notes due 2054.

This press release refers to the credit ratings that are published on the AM Best website. For all rating information relating to the release and related disclosures, including details of the agency responsible for issuing each of the individual ratings mentioned in this release, please see AM Best’s web page for recent rating activities. For further information on the use and limitations of credit score opinions, please see Best’s Guide to Credit Scores. For information on the proper use of Best Credit Ratings, Best Performance Ratings, Best Preliminary Credit Ratings, and AM Best Press Releases, please see the Guide to the Proper Use of Best Ratings and Ratings.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2024 by AM Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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Jennifer Asamoah
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